It's Unlikely That LexaGene Holdings Inc.'s (CVE:LXG) CEO Will See A Huge Pay Rise This Year

Key Insights

• LexaGene Holdings to hold its Annual General Meeting on 08 February 2023
• CEO Jack Regan's total compensation includes salary of US$338.5k
• Total compensation is 99% above industry average
• LexaGene Holdings' EPS grew by 12% over the past three years while total shareholder return over the past three years was -74%

The underwhelming share price performance of LexaGene Holdings Inc. (CVE:LXG) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 08 February 2023 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for LexaGene Holdings

Comparing LexaGene Holdings Inc.'s CEO Compensation With The Industry

Our data indicates that LexaGene Holdings Inc. has a market capitalization of CA$32m, and total annual CEO compensation was reported as US$482k for the year to February 2022. That's just a smallish increase of 3.4% on last year. We note that the salary portion, which stands at US$338.5k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Canadian Medical Equipment industry with market capitalizations under CA$266m, the reported median total CEO compensation was US$242k. Hence, we can conclude that Jack Regan is remunerated higher than the industry median. Moreover, Jack Regan also holds CA$1.4m worth of LexaGene Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$338k	US$250k	70%
Other	US$144k	US$216k	30%
Total Compensation	US$482k	US$466k	100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between LexaGene Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

LexaGene Holdings Inc.'s Growth

LexaGene Holdings Inc.'s earnings per share (EPS) grew 12% per year over the last three years. In the last year, its revenue is down 29%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has LexaGene Holdings Inc. Been A Good Investment?

Few LexaGene Holdings Inc. shareholders would feel satisfied with the return of -74% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for LexaGene Holdings (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.